Globe Telecom Inc. · PSE:GLO
Globe Telecom — Q3 2004 Earnings Presentation
19 slides from Globe Telecom's earnings presentation, Oct 28, 2004
Slide 1: 3Q04 Investors' Briefing
GLOBE TELECOM, INC. 3Q04 Investors’ Briefing 28 October 2004 1 President’s Message 2 1
Slide 2: 3rd Quarter of 2004: Growth in a Challenging Environment
3rd Quarter of 2004: Growth in a Challenging Environment Financial Results Reflect Marketing Investments 1. and Bond Redemption 2. Strategic Initiatives on Track 3. Subscriber Growth Continuing 4. G-Cash: M-Commerce Service Breakthrough 3 Financial Highlights (In P m) 9M04 9M03 YoY Growth Revenue Re
Slide 3: Net Income Breakdown
Net Income Breakdown (In (P P m)m) Three Months 3Q04 3Q03 Service Service Revenue Revenue 12,921 12,921 12,138 12,138 Service revenue Service revenue 26,173 EBITDA EBITDA EBITDA EBITDA 8,055 8,055 16,803 6,796 6,796 EBITDA EBITDA Margin Margin 64% Net Income* Net Income* 2,048 2,048 3,128 3,128 Net
Slide 4: Sales and Distribution Pervasiveness
Sales and Distribution Pervasiveness “Libre Load” Promotion Top Top Ups Ups Before Before (June (June 2004) 2004) After After (Sept. (Sept. 2004) 2004) % % of of Total Total Volume Volume 76% 76% 84% 84% % % of of Total Total Value Value 43% 43% 55% 55% ! Libre Load Promo in August to September ! 20
Slide 5: New Product and Service Initiatives
New Product and Service Initiatives International Globe Gizmo AutoLoad Max AutoLoad Max New mobile service for kids 7 to service already 12 years old with access to available in Hong learning tools, downloads, and Kong and instant connection to parents Singapore Globe Globe Ask a load Kababayan Prep
Slide 6: Aggressive Wireless Expansion On Track
Aggressive Wireless Expansion On Track ! Capex spending in-line with program ! More than 3,300 cell sites at the 11 end of September Sustained Subscriber Growth Quarterly Gross & Net Adds (‘ (‘000) 5,000 4,508 ! Wireless subscribers 4,500 reached 11.7 million 4,000 3,500 ! Postpaid 0.6 million 3,000
Slide 7: G-Cash: M-Commerce Service Breakthrough
G-Cash: M-Commerce Service Breakthrough 13 Service Breakthrough – !Cash-less and card-less micro payment over a mobile phone. !The country’s first and only mobile wallet service ! Purchase goods and services ! Send and receive money person to person or P2P ! Domestic and international remittances 14
Slide 8: G-Cash Service Breakthrough
Service Breakthrough – 15 Service Breakthrough – M-Commerce service. Transactions not merely limited to remittance. Registration is one-time and SMS-based. Only a self-assigned mobile PIN and recipients’ mobile number are required for transactions. G-Cash is cardless. Transactions and remittances ar
Slide 9: Future of G-Cash
Service Breakthrough – Future Future of of G-Cash G-Cash More More partner partner establishments establishments and and services to services to come come G-Cash G-Cash to to match match network network pervasiveness pervasiveness of of Autoload Autoload Max Max 17 Operational and Financial Performa
Slide 10: Net Income up 19% at P9.0 Billion
Net Income up 19% at P9.0 Billion Service Revenue (in P m) Net Income (in P m) 45,000 10,000 39,094 8,958 40,000 9,000 34,934 35,000 8,000 Net Income (in P m) 7,497 30,000 7,000 6,000 25,000 5,000 20,000 4,000 15,000 3,000 10,000 2,000 5,000 1,000 0 0 9M03 9M04 9M03 9M04 ! Service revenues up 12% y-
Slide 11: Wireless Revenues and Stable ARPUs
Wireless Revenues Revenues Breakdown (9M04) Wireless Data Revenues (9M04) Wireline Data Wireline 4% Voice 7% Wireless ~89% Data 40% Voice 60% " Regular SMS still the main contributor Total net service revenues: P39.1bn " Average daily SMS reached 103 million in the 3rd Quarter " Wireless service rev
Slide 12: Higher Churn; Managed Subscriber Acquisition Cost
Higher Churn Quarterly Churn ! Higher postpaid churn due to 18% aggressive competitive 16% 15.9% acquisition programs 14% 13.3% ! Higher prepaid churn due to 12% 10.6% impact of Free SIM Swap 10% ! Revised prepaid 7.5% 8% 6.8% 6.9% subscriber count policy to 6.0% 6% 5.1% 3.7% minimize impact of Free
Slide 13: Wireline Services
Wireline Services Wireline Voice Wireline Data Revenues (P m) As of 30 September 2004 2004 2004 2003 2003 2003 2004 As of 30 September 2004 2004 2003 2003 2003 Subscribers Subscribers Subscribers 308,376 246,095 Internat’l Internat’l Internat’l Lease Lease Lease 482 394 ARPU ARPU Gross Gross (P) ARP
Slide 14: Long Distance Services
Long Distance Services Decline in ILD Inbound Volume due to ISR 350 327 306 304 304 291 Volume (in M Minutes) 300 274 243 250 200 150 100 50 0 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 " Decline in ILD inbound volume due to International Simple Resale (ISR) " Globe implemented increased detection and block
Slide 15: EBITDA grew by 22%
EBITDA grew by 22% (P m) 9M04 1H04 9M04 9M03 1H03 9M03 ! EBIT at P13bn, up 14% Service 39,094 34,934 Non-service 2,186 1,352 ! Net interest Net Operating Revenue 41,280 36,286 Operating Cost & Expenses (16,422) (15,833) expense at EBITDA 24,858 20,453 P2.9bn Depreciation & Amortization (11,618) (8,7
Slide 16: Strong Balance Sheet
Strong Balance Sheet ! Total asset base at P139bn (P(P m)m) June 04 June9M03 9M04 9M04 03 9M03 (P m) 3Q04 3Q03 ! Consolidated cash & cash Current Assets 28,708 38,878 equivalents at P12bn Property and equipment - net 106,108 100,145 ! Net subscriber receivable days at 49 Other Assets 3,956 4,140 ! P
Slide 17: Debt Maturity Profile and Leverage
Debt Maturity Profile GLOBE MATURITY SCHEDULE In US$ 350 320 - 300 250 200 160 168 - - 150 127 - 100 69 40 - 50 - 11 1 - - - 2005 2006 2007 2008 2009 2010 2011 2012 " US$300m Senior Notes mature in 2012 " Globe has option to call starting33 2007 Healthy Leverage Profile Gross Debt / EBITDA (x) Debt
Slide 18: Shareholder Value Creation; Looking Ahead
Shareholder Value Creation Financial Highlights (in Pm) 10,000 8,958 9M04 9M03 9,000 8,000 7,497 7,000 6,000 Share SharePrice Price P1,090 P1,090 P695 P695 5,000 4,000 3,000 2,000 EPS* EPS* P63.63 P63.63 P49.01 P49.01 1,000 9,058 8,509 0 9M03 9M04 ROE ROE 23% 23% 19% 19% Free Cash Flow Net Income *9
Slide 19: Thank You
THANK YOU 37 19